Abstract: The Good Gambler: State Regulation and Public Debates on Futures Trading in British India and Germany, 1880-1930
Debates about the legitimacy of futures trading were omnipresent in the highly integrated world economy of the late nineteenth and early twentieth century. In this paper, we compare those debates in Germany and British India, two countries that were extremely diverse in their economic and political context and in the way they regulated futures trading. Germany was the first country worldwide to ban futures trading in selected commodities, while it remained largely unregulated in British India. Despite the formally different outcomes, we show that the respective debates resembled each other in many ways: in both countries futures exchanges were private organizations controlled by a small and in many ways privileged group of traders. In both countries these minorities were based on social ties and de facto controlled access to futures markets. Both groups were also faced with criticism because they were able to realize profits that a majority of people had no access to. Reviewing the debates we show that the main issue was not the legitimacy of futures trading but rather the distribution conflicts among the various interest groups that were engaged in futures trading.